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    Cash budget

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    Johnson Company budgeted the following information for 2006:
    May June July August
    Budgeted purchases $104,000 $110,000 $102,000 $100,000
    ? Cost of goods sold is 40% of sales. Accounts payable is used only for inventory acquisitions.
    ? Johnson purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month.
    ? Selling and administrative expenses are budgeted at $40,000 for May and are expected to increase 5% per month. They are paid during the month of acquisition. In addition, budgeted depreciation is $10,000 per month.
    ? Johnson pays $4,500 per month for its 6% note payable and interest.
    ? Income taxes are $38,400 for July and are paid in the month incurred.

    How much are the budgeted cash disbursements for July?

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    Solution Summary

    Solution contains calculation of the budgeted cash disbursements.